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  • Dec. 2008: It's time for Americans to take their blinders off
  • Dec. 2008: It's time for Americans to take their blinders off
  • Dec. 2008: It's time for Americans to take their blinders off
  • Dec. 2008: It's time for Americans to take their blinders off

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  1. #16
    Dec. 2008: It's time for Americans to take their blinders off 6 Shooter's Avatar
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    Default YEP - If your playing...

    ...in the Big Leagues ya need to carry a big bat and use it from time to time: If not the kids will be telling dad what to do!

    Later . . . . . . .
    6 Shooter

  2. #17
    Member minifridge1138's Avatar
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    This is a simple problem, but it has no simple solution.

    The problem:
    If the amount of money that comes out of a company is LESS than the amount of money that goes into the company, then the company will fail.

    There are two solutions to this problem:
    1) reduce the amount of money that goes out
    2) increase the amount of money that comes in

    A bail-out or loan is not a solution. It is a temporary boost of money going in, but it does not solve the problem. It will add water to the bucket, but it does not plug the hole.

    Raising the cost of cars would increase money coming in on a per car basis, but would reduce sales (and reduce money coming in), so I do not see that happening in the near future.

    Buying cheaper materials would reduce the amount spent on building the car, but could result in lower quality cars. Which would lower sales and reduce the money coming in.

    Selling more cars would increase money in, but demand is at a low. Companies are announcing layoffs by the thousands. People are worried about keeping their jobs and feeding their family. They are going to be more likely to keep their old cars running than buy new cars. So sales are at a low.

    Reduce the operating costs. The most viable option. Unfortunately, that usually results in people losing their jobs (I've been laid off twice this year, so please don't accuse me of being out of touch with workers). Reducing costs can create new jobs: someone has to keep the machines running. And there are other ways to reduce cost that do not involve cutting jobs (I would gladly have taken a pay cut rather or see my co-pays go up than loose my jobs).

    How can a bailout help?
    As mentioned earlier, it is not a solution; it only buys time. Hopefully, it will buy enough time that two things can happen:
    1) Demand for cars increases. Selling more cars increases money coming in.
    2) Operating costs can be reduced without cutting jobs. Machines that use less electricity, cheaper power from new sources (long term goal, not short term), reduced corporate spending, retooling factories to produce cars with greater demand, and some compromises with UAW.

    Hopefully, I haven't picked sides. I was talking about possible solutions (some of them are probably unrealistic) and not blaming anyone for causing this mess. That is a different rant.

    Good luck!!!

  3. #18
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    Minifridge1138 - nicely done to stay in the middle

    6 Shooter - The big bat theory has gotten the union and the manufacturers where they are today. Teetering on no company and not a single job for any employees. Not a great result for anyone, in the long term!

  4. #19
    Administrator Yoda's Avatar
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    ANY business that means to be successful puts together a cost analysis: cost of doing business ~ profits minus expenses ~ (Short version)

    The bottom line in any Business Model is to continue to grow and prosper! Major, I mean BIG corporations have MBA’s, and other financial PHD type guru’s to study trends and future revenue streams, economic forecasts to help mold and give insight to update their Business Model. This Brain Trust provide the decision makers with all those charts and graph’s. Let’s not forget the figures they bounce around the Board Rooms that only the true Bean Counters understand. From all that Brain Trust and the fortitude to succeed, risks are taken and real Hands On business decisions are made. It may not be pretty, but the company lives or dies by these decisions.

    On a lot smaller scale and as individuals we are responsible for our on weight gain, people we choose to associate with, type of home we live in, type of automobile we drive etc. . If our goals and objectives are not being met, or seem out of reach, we have choices. Do what needs to be done to accomplish our goals, e.g. more/better education, change career paths, “leverage” property to provide the scratch for the insatiable itch. Then there is “wish in one hand and _____ in the other” and see which one fills up first!! They all come risk/reward, some are more desirable than others. (And most of us do this without the perception or aid of MBA's and PHD's, we are accountable for our decisions)

    Pure speculation on my part ~ I bet General Motors is/has diversified and is much more that Just Detroit Iron. At one time I recall GM having corporate holdings and investments (auto and NON-auto related companies) in more than 20 Countries. I wonder if all GM’s holdings are on the cliff of failure.

    Great discussion s
    Life is NOT for the weak at HEART!

    Bud

  5. #20
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    Rob, I cannot disagree with your argument that we need our automobile manufacturing capabilities. The thought of a foreign logo on our beloved Corvette is indeed repugnant. With full support for saving our companies, I must profoundly question the government's approach to that salvation. A quick look at the advertised "facts" should dispel any notion that a bailout will truly work.
    The Big 3 requested $34 Billion to "tide" them over until the end of March. The math says that they have a burn rate of $11B/month. What does their business plan say about when they will become profitable and be able to pay back the loan? Figures quoted indicates that 2010 is a possibility. Assuming that is a good date, the price tag is now up another $165B or so. You have to ask if they will really be profitable then. Look back two years when times were good, full employment, growing wages, easy credit, etc., and they were still losing billions each year.
    For the bailout to be even considered, the following questions have to be answered, not just with rhetoric but with fully sustainable facts. Also, stipulation must be put on the government oversight to prevent the companies from being strangled by the experts in our U.S. Congress.
    1. When will the companies become profitable?
    2. How many units must they sell to meet that goal?
    3. When will the economy(i.e. employment) reach the level to absorb those units?
    4. Assuming no more easy credit, how many buyers will be locked out of the market?
    5. Will emissions and mileage requirements be relaxed until the market recovers?
    6. Will the companies truly be allowed to build what the consumer wants or what the
    government decrees?
    7. Can three companies survive in the projected market given the number of units that
    must be sold for them to survive?
    8. If all the billions reqested do not achieve the desired results, who pays back the
    "Bridge Loans" which can conceivably reach a half trillion dollars.
    If someone can show me that X billion dollars over Y years equal three viable companies
    with full payback of the loans, sign me up for the bailout. If it is just going to be a crapshoot, meet me in Vegas.
    NCM Life Member #300
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  6. #21
    Administrator Yoda's Avatar
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    Paul I couldn't agree more ~ so what dates work for you to meet in Las Vegas

    Bud

  7. #22
    Member gmjunkie's Avatar
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    Quote Originally Posted by Yoda View Post
    Paul I couldn't agree more ~ so what dates work for you to meet in Las Vegas

    Bud
    If you guys can make it before Jan 15th or so I'll drive Steve's car and keep the miles down on mine!!

    It's got so it seems to me that the Internet has created a lot more Horses A$$'s than we have Horses!
    junk!~!!
    Founding Member: 10 Corvettes Anonymous


  8. #23
    Member vett boy's Avatar
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    Quote Originally Posted by gmjunkie View Post
    If you guys can make it before Jan 15th or so I'll drive Steve's car and keep the miles down on mine!!

    Hey ,i'm keepin' my eye on you fella

    I'm also watchin' GM closely.Keep in mind GM does a lot in the defence industry .Who'll fill that gap China ?

  9. #24
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    It's the perception of the lack of quality the big three need to battle. It took about 30 years for Toyota to battle the moniker of " made in japan" ( for all of us that remember that) that made it derogatory, now it said with pride for the Japanese.
    I have no argument that the American worker is the best, head to head with any foreign worker. I do however have the a problem with the quality of the engineering the the big three have, and the business decisions the executives used that got them here at this point in time.
    Whats needed is for the executives to leave and get some real car guys to take charge and start steering in a direction that will get the car buying public to actually buy car that they want!! NOT what congress wants us to buy!


  10. #25
    Member Bonnell's Avatar
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    Quote Originally Posted by LT4man View Post
    Rob, very well written. I concur with your opinions 100%.

    Time for our country to take back the manufacturing and the innovation we have allowed to leave.

    Time to tell the UAW they will have to start playing by the Big 3's rules, not theirs!

    WHILE ALL THIS IS GOING ON, WILL SOMEONE PLEASE SAVE THE ?

    I agree.

  11. #26
    Administrator Yoda's Avatar
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    Bailout, Bridge Loan call what you like, there isn’t neither enough money nor government help that will provide the relief needed by ALL the greed. Yep GREED, you, me, small business, large business and our Government.

    We don’t have to look too far back to see a very similar pattern…. Of greed.. Remember these institutions and the abuse they “fostered” Federal Land Bank ~ Farm Credit System. It wasn’t the fault of these fine Government backed institutions,..... Well they contributed to all the FARM FORECLOSERS in the late ‘70s and early ‘80s. It takes 2 to tangle. The inflationary price for land, and the GREED of ALL parties brought down many family owned farms. Even some huge Insurance Companies and Foreign Investors found the bone pile back then.

    Personal accountability and sound business decisions were cast aside and customers couldn’t sign notes fast enough (read Contracts) for what “They couldn’t believe” to be true loans on their property and homes. When the government started using agricultural products as a “weapon” to influence policy… well we all know what happened. Loans came due, and land prices and farm commodities fell like a lead ballon.

    That was some 25 or 30 years ago. Now we see a similar economic crisis rearing it’s ugly head in the form of “home mortgages and business failures.” We all share in this debacle…. As consumers, as business owners.... The Golden Goose was running through everyone’s yard laying those Golden Eggs, seems we all forgot that if you don’t feed the Goose, and provide a little care, the Goose will die and even if the Golden Goose is cared for, it only lives so long.

    I can not believe that the Big 3 will fail without a Government Bailout. I may be naïve or too cynical. If there is a way to turn the Auto Industry around, then there will be investors. It may require a purchase through bankruptcy and a complete restructure before the price is appealing enough.

    Having the Government take over ANY control of the Auto Industry would be like having a wolf or fox taking care of the Golden Goose!

    The FARM Community, and agricultural products survived the depression of the ‘30s, it survived the ‘80s … Will the Auto Industry survive … Will we still have a Chicken (Goose) in every pot and 3 or more Vehicles in every driveway?? As the old saying goes… the Best Times about owning a boat, “The Day I bought it and the Day I SOLD it…”

    Bud

  12. #27
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    Quote Originally Posted by LT4man View Post
    Rob, very well written. I concur with your opinions 100%.

    Time for our country to take back the manufacturing and the innovation we have allowed to leave.

    Time to tell the UAW they will have to start playing by the Big 3's rules, not theirs!

    WHILE ALL THIS IS GOING ON, WILL SOMEONE PLEASE SAVE THE ?
    Let me start by saying I am not a UAW supporter, however I wil say all the bailouts in the world won't help if people don't buy their products. American cars are as good or better than imports! BUT even if they aren't "YOU ARE BUYING MORE THAN A CAR. YOU ARE BUYING A LIFESTYLE" You can pay for the japanese economy to boom or your own. The thing about the UAW is they took a lot of money out of the corporation and put it into the economy by SPENDING it in bussineses like mine all over the country. I took that money and spent it in businesess like yours! It is time for americans to stop being so damn "me" oriented and do what's right for the country.Because if your neighbor isn't thriving neither will you for long. We are all interconnected. Finally, I watched the senate hearings with the big 3 bosses-what an outrage! These arrogant SOBs telling the CEOs the missmanaged their companies money now they what taxpayers to bail them out. They should have straightened their houses out long ago. WHAT CRAP! these jokers have grotesquely mismanaged the business of our country with no sign of fixing their house. Whenever they need more money they get a "taxpayer bailout" by raising taxes. Worse yet they are now borrowing money from our grand kids. This is revolting. And for them to call the car compnies out. OUTRAGEOUS. We NEED to wake up folks! Buy AMERICAN! and lets vote these jerks out of office and get some decent people in there before it's to late.

  13. #28
    Dec. 2008: It's time for Americans to take their blinders off 67HEAVEN's Avatar
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    johnm,

    Wouldn't change a word.

  14. #29
    Gone but not forgotten XLR8's Avatar
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    johnm,
    You made some very valid points, thank you for speaking up.

    Money paid to American workers goes right back into our economy, our communities, our schools, providing more jobs for more Americans. Good point.

    And it's hilarious, ironic, or pathetic - you chose your favorite term - that the people questioning, badgering and chastising the CEO's are collectively the most stupid and poorest money managers on the planet.

    Jane Ann

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    Default It's time for Americans to take their blinders off

    Hi Rob,

    There is another reason most Americans are against the bailout and encouraging the auto companies to declare bankrupcy. It is the Unions!

    Once they declare bankrupcy, the union contracts will be void, and the auto companies can start over without the burden of high wages, early retirement with benefits, production limitations, and the health insurance burden. When these restrictions are removed, the auto companies can start to compete on a more equitable basis with foreign manufacturers.

    I am not suggesting that the Unions are the sole reason for the auto manufacturers demise, but it is the major cause for their losing money.

    LT4 CE

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